On 30 October 2015 another consultation paper appeared from the Government on reforming business rate appeals.
Paul Easton, National Head of Business Rates at Lambert Smith Hampton reviews the latest consultation.
“The Government has asked for views from stakeholders, including ratepayers, local councils and others by 4 January 2016, with a view to all the new changes being in force for the next business rates revaluation on 1 April 2017.
While the thrust of this latest paper is to simplify the procedure and to have a check, challenge and appeal system, the latest proposals appear substantially convoluted and loaded against the ratepayer.
One of the main issues ratepayers have is that they don’t know how the Valuation Office Agency (‘VOA’) arrives at its rateable values. In most cases, you can see the valuation on the VOA website but this does not show what rental evidence the VOA has used to arrive at a rateable value. The VOA steadfastly refuses to show its workings, rental evidence and analysis at any early stage, hiding behind the Commissioner for Revenue and Customs Act 2005.
Uniquely, this is the only form of taxation in England where it is not made clear how the tax base (rateable value) has been calculated. As such, many of the appeals under the current system are made just to flush this information out from the VOA – a hugely wasteful and confusing process.
The latest proposals will not improve things. The onus on the ratepayer to say why their rateable value is wrong will be set at a much higher level under the proposed system and is heavily biased towards the VOA. If the VOA provided the information on how it arrived at a rateable value in the first place, then a ratepayer could decide whether to challenge it or not, thereby reducing the number of challenges and appeals that the VOA receives.
The proposals also include charging to make an appeal. This is a first and is unlikely to receive support, especially from smaller and unrepresented ratepayers, even if the appeal fee is refundable if successful. It is not an alternative to any professional fee incurred in the challenge.
While the Department of Communities and Local Government (‘DCLG’) will likely receive a large number of responses to its consultation paper, the most important question is will it listen? On business rates, there has been a history of reaching out to ratepayers and external parties, receiving feedback and then filing the responses with absolutely no resulting tangible action or change.”